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Poorest taxed for bigger share of pay

Tories make play for millionaire tax cut despite huge disparity

BRITAIN’S poorest families pay a higher share of their income in tax than the richest, new figures showed yesterday as shameless Tories clamoured for a second tax cut for millionaires.

The richest fifth of the population had an average income of £80,800 before taxes and benefits last year, according to the Office for National Statistics (ONS).

That’s 15 times more than the meagre £5,500 earned by the poorest fifth of households.

And yet the poorest fifth of families contribute 37.8 per cent of their earnings in income tax — 3 per cent more than the richest fifth.

The findings of ONS’s annual household income survey were revealed amid reports that 160 Tory MPs, including cabinet ministers, want the top rate of tax to be cut.

People have paid 45p for every pound earned over £100,000 since Chancellor George Osborne cut the top rate from 50p in 2013.

Now senior Tories want him to deliver a second tax cut for Britain’s richest in three years when he delivers the first all-Tory budget for two decades on July 8.

They want the top rate to be cut to just 40p while slashing welfare spending by £12 billion.

Former minister Liam Fox told the Telegraph: “Reducing tax rates ultimately produces more economic activity and therefore more tax revenue.”

But TUC general secretary Frances O’Grady said: “There can be no argument for reducing taxes for the richest when they are already contributing a smaller share of their income than the poorest.

“The government should instead be looking at how the wealthiest can make a fairer contribution to improving the public finances.”

Shameless Work and Pensions Secretary Iain Duncan Smith is leading calls for the cut at cabinet level, despite overseeing the closure of the Independent Living Fund for disabled people today.

The TUC also raised concerns over Tory plans to cut working tax credits and freeze child tax credit.

Cash benefits, including tax credits, make up 57 per cent of income for the poorest fifth of families, the ONS statistics show.

And Ms O’Grady warned: “Without tax credits, the low-paid would be much worse off. It will be a disaster for millions of families if the government rushes ahead with plans for extreme cuts to support for people in work.”

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